Common use of DEGREE OF FAIRNESS OF PROJECT Clause in Contracts

DEGREE OF FAIRNESS OF PROJECT. SPECIFIC NEGOTIATIONS Xxxxxx observed only one negotiation session between the PG&E and NextEra teams in the summer of 2013. NextEra requested very few changes from the version of PG&E’s Form Agreement provided to the seller in July (this probably accounts for the limited number of discussions), and most of those requests for modifications were rejected by the utility. Instead, most of the variances from the Form Agreement were introduced by PG&E, apparently in an effort to ensure that, in the interest of fair treatment, there were no significant disparities in treatment of NextEra vs. other sellers with whom the utility was negotiating in parallel. ' ' '' The NextEra PSA may usefully be compared to two bilaterally negotiated contracts that PG&E signed with Barclays Bank PLC in 2010, which were amended earlier in 2010. While the Barclays transactions were to sell firmed-and-shaped bundled RPS-eligible energy to PG&E for a shorter delivery term, they are somewhat analogous to the NextEra PSA in the nature of benefits. The confirmation agreements with Barclays did specify particular generation projects to deliver the product; this was consistent with the nature of the deliverables as firmed bundled RPS-eligible energy. ' It appears that the NextEra contract has stronger ratepayer protections in these specific areas than these older Barclays agreements that were recently amended. Xxxxxx did not observe PG&E providing NextEra with non-public information that advantaged it against competing sellers. Because PG&E approached several possible intermediaries seeking to purchase unbundled RECs on a bilateral basis, Xxxxxx does not believe that NextEra was singled out for favored treatment or that other market participants were disadvantaged by the choice to conduct bilateral negotiations with NextEra. Furthermore, any market participant could have chosen to offer Category 3 RECs into PG&E’s 2012 RPS RFO '' Because of PG&E’s effort to minimize disparate treatment of sellers whose PSAs were developed in parallel with the NextEra PSA, in Xxxxxx’x opinion the negotiations with NextEra were conducted fairly with respect to competitors. The remaining disparities among the NextEra, Iberdrola, and Sterling Planet PSAs do not seem sufficient in likely impact to lead Xxxxxx to regard NextEra and Sterling Planet as having been competitively disadvantaged. One issue with the NextEra negotiation is whether the modifications that PG&E introduced to ensure greater fairness in its treatment of NextEra compared to competitors actually impeded the fairness with which ratepayers were treated. These changes amounted to concessions that, for the most part, NextEra did not request, and which arguably reduced ratepayer protections compared to PG&E’s Form Agreement. ' ' Xxxxxx’x opinion is that PG&E’s negotiations with NextEra were, overall, conducted fairly with respect to competitors, and, with the exception of dropping the requirement of specifying projects from which RECs will be delivered, with respect to ratepayers.

DEGREE OF FAIRNESS OF PROJECT. SPECIFIC NEGOTIATIONS Xxxxxx observed only one negotiation session Negotiations to amend the existing contract between the PG&E and NextEra teams in Shiloh Wind Project 2 featured a quid pro quo: the summer seller shifted the newly increased risks and costs of 2013. NextEra requested very few changes from the version of PG&E’s Form Agreement provided its role as scheduling coordinator to the seller in July (this probably accounts for the limited number of discussions)utility, and most of those requests for modifications were rejected PG&E in return obtained the right to order buyer curtailments, subject to specific operational constraints. Contract price did not change. Xxxxxx views the concessions that PG&E granted to Shiloh Wind Project 2 relative to the current form contract as generally minor and in some cases meritorious. For example: In contrast, PG&E did not agree to various concessions requested by EDF RE that could have weakened other contract requirements relative to the utilityform agreement or transferred risks or costs to ratepayers or weakened system security. InsteadOverall, most the outcome of the variances from negotiation seemed to tilt towards the Form Agreement were introduced by PG&E, apparently seller but not in an effort ways that Xxxxxx judges to ensure that, in the interest of fair treatment, there were no significant disparities in treatment of NextEra vs. other sellers with whom the utility was negotiating in parallel. ' ' '' The NextEra PSA may usefully be compared clearly harmful to two bilaterally negotiated contracts that PG&E signed with Barclays Bank PLC in 2010, which were amended earlier in 2010. While the Barclays transactions were to sell firmed-and-shaped bundled RPS-eligible energy to PG&E for a shorter delivery term, they are somewhat analogous to the NextEra PSA in the nature of benefits. The confirmation agreements with Barclays did specify particular generation projects to deliver the product; this was consistent with the nature of the deliverables as firmed bundled RPS-eligible energy. ' It appears that the NextEra contract has stronger ratepayer protections in these specific areas than these older Barclays agreements that were recently amendedinterests. Xxxxxx did not observe PG&E providing NextEra the EDF RE team with non-public information that advantaged it against competing sellers. Because PG&E approached several possible intermediaries seeking to purchase unbundled RECs on a bilateral basis, Xxxxxx does not believe that NextEra was singled out for favored treatment or that other market participants Shiloh Wind Project 2’s competitors were materially disadvantaged by the choice to conduct bilateral negotiations with NextEraterms that the parties negotiated . Furthermore, any market participant could have chosen to offer Category 3 RECs into PG&E’s 2012 RPS RFO '' Because of PG&E’s effort to minimize disparate treatment of sellers whose PSAs were developed in parallel with the NextEra PSA, in Xxxxxx’x opinion the negotiations with NextEra were conducted fairly with respect to competitors. The remaining disparities among the NextEra, Iberdrola, and Sterling Planet PSAs do not seem sufficient in likely impact to lead Xxxxxx to regard NextEra and Sterling Planet as having been competitively disadvantaged. One issue with the NextEra negotiation is whether the modifications that PG&E introduced to ensure greater fairness in its treatment of NextEra compared to competitors actually impeded the fairness with which ratepayers were treated. These changes amounted to concessions that, for the most part, NextEra did not request, and which arguably reduced ratepayer protections compared to PG&E’s Form Agreement. ' ' Xxxxxx’x opinion is that PG&E’s negotiations with NextEra were, overall, Shiloh Wind Project 2 for the amended and restated contract were conducted fairly with respect to competitors, and, competitors with the one exception noted above. A discussion of dropping possible impacts and benefits borne by ratepayers is provided in the requirement of specifying projects from which RECs will be delivered, with respect to ratepayersnext chapter.

DEGREE OF FAIRNESS OF PROJECT. SPECIFIC NEGOTIATIONS Xxxxxx observed only one negotiation session between the PG&E and NextEra teams in the summer of 2013. NextEra Overall, Recurrent Energy requested very few changes from the revised version of PG&E’s 2012 RPS Form Agreement provided to the seller in July (this probably accounts for May 2013. Of the limited number of discussions)requested changes, and most of PG&E granted few concessions. Xxxxxx believes that those requests for modifications were rejected by the utility. Instead, most of the variances changes from the Form Agreement were introduced by reasonable, and likely will have minimal adverse impact on ratepayers. While RE Astoria has obtained ' ' As noted in the chapter on the evaluation process, PG&E selected RE Astoria for its short list at the same time it rejected a competing Offer which had a higher valuation. The competing proposal, was also for an attractively priced southern California solar photovoltaic facility. This action seems to be inconsistent with the fairness principle that an IOU’s selection methodology should provide consistent evaluation of Offers of different size; PG&E’s 2012 RPS solicitation protocol did not express a preference regarding the size of projects. PG&E might have rejected the smaller project based on its stated criterion of avoiding excess counterparty concentration; however, apparently as previously noted, the utility appears to have applied that criterion to limit the total number of shortlisted Offers per seller in an effort inconsistent way. However, Xxxxxx now considers fairness concerns about how treated compared to ensure that, in the interest of fair treatment, there were no significant disparities in treatment of NextEra vs. other sellers with whom the utility RE Astoria to be negligible or moot because ' was negotiating in parallel. ' ' '' The NextEra PSA may usefully be compared to two bilaterally negotiated contracts that PG&E signed with Barclays Bank PLC in 2010, which were amended earlier in 2010. While the Barclays transactions were to sell firmed-and-shaped bundled RPS-eligible energy to PG&E for a shorter delivery term, they are somewhat analogous to the NextEra PSA in the nature of benefits. The confirmation agreements with Barclays did specify particular generation projects to deliver the product; this was consistent with the nature of the deliverables as firmed bundled RPS-eligible energy. ' It appears that the NextEra contract has stronger ratepayer protections in these specific areas than these older Barclays agreements that were recently amended. ' Xxxxxx did not observe PG&E providing NextEra RE Astoria with non-public information that advantaged it against competing sellers. Because With the minor exception of the terms regarding RE Astoria’s treatment by PG&E approached several possible intermediaries seeking to purchase unbundled RECs on a bilateral basisduring negotiations was, Xxxxxx does not believe that NextEra was singled out for favored overall, comparable with the treatment or that other market participants were disadvantaged by of its competitors in the choice to conduct bilateral negotiations with NextEra. Furthermore, any market participant could have chosen to offer Category 3 RECs into PG&E’s 2012 RPS RFO '' Because of PG&E’s effort to minimize disparate treatment of sellers whose PSAs were developed in parallel with the NextEra PSA, in Xxxxxx’x opinion the negotiations with NextEra were conducted fairly with respect to competitorsRFO. The remaining disparities among the NextEra, Iberdrola, and Sterling Planet PSAs do not seem sufficient in likely impact to lead Xxxxxx to regard NextEra and Sterling Planet as having been competitively disadvantaged. One issue with the NextEra negotiation is whether the modifications that PG&E introduced to ensure greater fairness in its treatment of NextEra compared to competitors actually impeded the fairness with which ratepayers were treated. These changes amounted to concessions that, for the most part, NextEra did not request, and which arguably reduced ratepayer protections compared to PG&E’s Form Agreement. ' ' Xxxxxx’x opinion is that PG&E’s negotiations with NextEra were, overall, RE Xxxxxxx were conducted fairly with respect to ratepayers and competitors, and, with the exception of dropping the requirement of specifying projects from which RECs will be delivered, with respect to ratepayers.

DEGREE OF FAIRNESS OF PROJECT. SPECIFIC NEGOTIATIONS Overall, the negotiations to amend the existing contract between PG&E and CalRENEW-1 featured a quid pro quo: the seller shifted the risks and costs of its role as scheduling coordinator to the utility, and PG&E in return obtained the right to order buyer curtailments, subject to specific operational constraints. The contract price did not change, though PG&E ratepayers may or may not obtain some economic benefit from . Xxxxxx observed only one negotiation session views the variances in terms between the PG&E amended PPA and NextEra teams in the summer of 2013. NextEra requested very few changes from the version of PG&E’s 2013 Form Agreement provided to the seller be minor in July (this probably accounts for the limited number of discussions)their impact, and most of those requests for modifications were rejected by the utility. Instead, most of the variances from the Form Agreement were introduced by PG&E, apparently in an effort to ensure that, in the interest of fair treatment, there were no significant disparities in treatment of NextEra vs. other sellers with whom the utility was negotiating in parallel. ' ' '' The NextEra PSA may usefully be compared to two bilaterally negotiated contracts that PG&E signed with Barclays Bank PLC in 2010, which were amended earlier in 2010. While the Barclays transactions were to sell firmed-and-shaped bundled RPS-eligible energy to PG&E for a shorter delivery term, they are somewhat analogous to the NextEra PSA in the nature of benefits. The confirmation agreements with Barclays did specify particular generation projects to deliver the product; this was generally consistent with the nature type of the deliverables as firmed bundled RPS-eligible energy. ' It appears that the NextEra contract has stronger ratepayer protections in these specific areas than these older Barclays agreements that were recently amendedterms provided to CalRENEW-1’s competitors through negotiation. Xxxxxx did not observe PG&E providing NextEra the Meridian Energy team with non-public information that advantaged it against competing sellers. Because PG&E approached several possible intermediaries seeking to purchase unbundled RECs on a bilateral basis, Xxxxxx does not believe that NextEra was singled out for favored treatment or CalRENEW-1 has been treated in a materially disparate manner from . Xxxxxx does not believe that other market participants CalRENEW-1’s competitors were materially disadvantaged by the choice to conduct bilateral terms that the parties negotiated; . Xxxxxx’x opinion is that PG&E’s negotiations with NextEra. Furthermore, any market participant could have chosen to offer Category 3 RECs into PG&E’s 2012 RPS RFO '' Because of PG&E’s effort to minimize disparate treatment of sellers whose PSAs were developed in parallel with Meridian Energy for the NextEra PSA, in Xxxxxx’x opinion the negotiations with NextEra amended CalRENEW-1 contract were conducted fairly with respect to competitors. The remaining disparities among A discussion of possible impacts borne by ratepayers is provided in the NextEra, Iberdrola, next chapter. 3 . M E RI T F O R C P U C A P P ROVA L This chapter provides an independent review of the merits of the amended and Sterling Planet PSAs do not seem sufficient restated contract between PG&E and CalRENEW-1 LLC against criteria identified in likely impact to lead Xxxxxx to regard NextEra and Sterling Planet as having been competitively disadvantaged. One issue with the NextEra negotiation is whether the modifications that PG&E introduced to ensure greater fairness in its treatment of NextEra compared to competitors actually impeded the fairness with which ratepayers were treated. These changes amounted to concessions that, for the most part, NextEra did not request, and which arguably reduced ratepayer protections compared to PG&EEnergy Division’s Form Agreement. ' ' Xxxxxx’x opinion is that PG&E’s negotiations with NextEra were, overall, conducted fairly with respect to competitors, and, with the exception of dropping the requirement of specifying projects from which RECs will be delivered, with respect to ratepayers2013 RPS IE template.

DEGREE OF FAIRNESS OF PROJECT. SPECIFIC NEGOTIATIONS Overall, the negotiations to amend the existing contract between PG&E and CalRENEW-1 featured a quid pro quo: the seller shifted the risks and costs of its role as scheduling coordinator to the utility, and PG&E in return obtained the right to order buyer curtailments, subject to specific operational constraints. The contract price did not change, though PG&E ratepayers may or may not obtain some economic benefit from . Xxxxxx observed only one negotiation session views the variances in terms between the PG&E amended PPA and NextEra teams in the summer of 2013. NextEra requested very few changes from the version of PG&E’s 2013 Form Agreement provided to the seller be minor in July (this probably accounts for the limited number of discussions)their impact, and most of those requests for modifications were rejected by the utility. Instead, most of the variances from the Form Agreement were introduced by PG&E, apparently in an effort to ensure that, in the interest of fair treatment, there were no significant disparities in treatment of NextEra vs. other sellers with whom the utility was negotiating in parallel. ' ' '' The NextEra PSA may usefully be compared to two bilaterally negotiated contracts that PG&E signed with Barclays Bank PLC in 2010, which were amended earlier in 2010. While the Barclays transactions were to sell firmed-and-shaped bundled RPS-eligible energy to PG&E for a shorter delivery term, they are somewhat analogous to the NextEra PSA in the nature of benefits. The confirmation agreements with Barclays did specify particular generation projects to deliver the product; this was generally consistent with the nature type of the deliverables as firmed bundled RPS-eligible energy. ' It appears that the NextEra contract has stronger ratepayer protections in these specific areas than these older Barclays agreements that were recently amendedterms provided to CalRENEW-1’s competitors through negotiation. Xxxxxx did not observe PG&E providing NextEra the Meridian Energy team with non-public information that advantaged it against competing sellers. Because PG&E approached several possible intermediaries seeking to purchase unbundled RECs on a bilateral basis, Xxxxxx does not believe that NextEra was singled out for favored treatment or CalRENEW-1 has been treated in a materially disparate manner from . Xxxxxx does not believe that other market participants CalRENEW-1’s competitors were materially disadvantaged by the choice to conduct bilateral terms that the parties negotiated; . Xxxxxx’x opinion is that PG&E’s negotiations with NextEra. Furthermore, any market participant could have chosen to offer Category 3 RECs into PG&E’s 2012 RPS RFO '' Because of PG&E’s effort to minimize disparate treatment of sellers whose PSAs were developed in parallel with Meridian Energy for the NextEra PSA, in Xxxxxx’x opinion the negotiations with NextEra amended CalRENEW-1 contract were conducted fairly with respect to competitors. The remaining disparities among A discussion of possible impacts borne by ratepayers is provided in the NextEra, Iberdrola, next chapter. 3 . M E RI T F O R CP U C A P P ROVA L This chapter provides an independent review of the merits of the amended and Sterling Planet PSAs do not seem sufficient restated contract between PG&E and CalRENEW-1 LLC against criteria identified in likely impact to lead Xxxxxx to regard NextEra and Sterling Planet as having been competitively disadvantaged. One issue with the NextEra negotiation is whether the modifications that PG&E introduced to ensure greater fairness in its treatment of NextEra compared to competitors actually impeded the fairness with which ratepayers were treated. These changes amounted to concessions that, for the most part, NextEra did not request, and which arguably reduced ratepayer protections compared to PG&EEnergy Division’s Form Agreement. ' ' Xxxxxx’x opinion is that PG&E’s negotiations with NextEra were, overall, conducted fairly with respect to competitors, and, with the exception of dropping the requirement of specifying projects from which RECs will be delivered, with respect to ratepayers2013 RPS IE template.